News 2025

Is your audit firm compliant with the UK Audit Regulations provisions impacting eligibility for UK audit registration? Firms holding UK audit registration are reminded of the requirement to comply with certain provisions of the UK Audit Regulations by 1 April 2025.   These are important provisions relevant to a firm’s eligibility for UK audit registration.  As previously notified to firms, the UK Audit Regulations published in October 2024, include updates to improve alignment with the UK Companies Act 2006 and the FRC Eligibility Criteria.  The definitions of ‘majority’ and ‘voting rights’ for the purposes of determining the control of an audit firm were clarified, and related guidance expanded.  Audit firms with UK registration may be affected where a ‘super-majority’ (more than 50%) is required for certain decisions of the firm to take effect.  To summarise, decisions on all matters that direct the overall policy of the firm or alter its constitution need to be controlled by qualified persons.  If your firm has matters in its constitution that specify a higher than simple majority (50%), then qualified persons must hold the specified ‘super-majority’ (more than 50%).  In addition, if your firm is a limited company, it must also ensure that specific matters that require special resolution approval under company legislation (i.e., by a majority of not less than 75%) are controlled by qualified persons.  These matters will typically affect the firm’s constitution e.g. change of company name, amending the Articles of Association/Constitution, winding up of the firm, reduction in share capital etc.  As such, firms that are limited companies will need to ensure they have sufficient qualified persons to approve any decisions that require a special resolution to be passed.  A limited company firm may be able to include provisions in its Articles of Association/Constitution to deprive a certain class/type of shareholders of the right to vote in certain circumstances.  The Institute advises limited company firms, with audit registration in the UK, to obtain legal advice on whether changes are needed to their Articles of Association/Constitution to ensure qualified persons hold a majority of voting rights. The UK Audit Regulations are issued jointly by Chartered Accountants Ireland, the Institute of Chartered Accountants in England and Wales (ICAEW) and the Institute of Chartered Accountants of Scotland (ICAS).  While the UK Audit Regulations were revised with effect from 1 October 2024, a transition period of 6 months was incorporated so that these particular rules take effect from 1 April 2025.  This transition period allowed a period of time for firms to effect necessary governance changes.  Firms are reminded of the requirement to inform the Institute promptly in relation to changes to the firm’s structure, ownership or constitution in accordance with Audit Regulation 2.11. ICAEW has published some useful FAQs in relation to the UK Audit Regulations and eligibility criteria.     The FRC issued a position paper in this regard in August 2024.   The Firms with any questions about the application of these revised definitions to their firm should contact the Institute at authorisations@charteredaccountants.ie.

In recent months the Institute has approved certain Institute Registered Auditors (audit firms), and responsible individuals (RIs) at those firms, to carry out sustainability assurance engagements in Ireland, pursuant to the EU Corporate Sustainability Reporting Directive (CSRD) as transposed into Irish law.  These are referred to as ‘approved firms’ and sustainability assurance service providers (SASPs) respectively.   The recent Omnibus proposals from the EU Commission have created uncertainty over the scope of the CSRD going forward.  Audit firms should be alert to these emerging developments when considering whether and/or when to seek approval to carry out sustainability assurance engagements.  Transitional (‘grandfathering’) arrangements for SASP approval The EU Omnibus package does not include proposals to directly change the transitional (‘grandfathering’) arrangements for SASP approval. Therefore, it remains the case that an individual approved as a RI in Ireland before 1 January 2026 can avail of transitional arrangements when applying for approval as a SASP.   Under those transitional arrangements a RI is eligible for SASP status if he/she undertakes a minimum of 60 hours of CPD in the relevant subjects.   Note that a RI who is approved as RI in Ireland before 1 January 2026 does not have to apply for SASP status before 1 January 2026 to be eligible to avail of the transitional arrangements described above.  A person approved as RI on/after 1 January 2026 who applies for SASP status will be required, by law, to complete an examination and 8 months relevant practical experience to gain the sustainability assurance qualification. Eligibility for approval to carry out sustainability assurance engagements The eligibility criteria for SASP and firm approval are set out in the Institute’s Audit Regulations (incorporating assurance under CSRD) and Guidance, Ireland (the Audit Regulations).   The Institute has prepared FAQs to provide information for audit firms and RIs considering applying for approval to carry out sustainability assurance engagements. For audit firms who do wish to apply for approval at this time, the audit compliance principal can start the application process by contacting sasp-applications@charteredaccountants.ie to request the relevant application forms.    When an audit firm first applies for approval to carry out sustainability assurance engagements at least one RI at the firm must also submit an application for approval as a SASP. Ongoing obligations of approved firms and SASPs Once approved to carry out sustainability assurance engagements, an approved firm and SASP have ongoing obligations in relation to SASP CPD, compliance with relevant provisions of the Audit Regulations and annual regulatory fees relating to sustainability assurance approved status.  Regulatory Fees It is necessary for the Institute to collect regulatory fees to fund the Institute’s work in providing a robust regulatory framework for approved firms and SASPs.  Each application for SASP status is subject to an approval fee.  From 2026, ongoing annual regulatory fees will also be payable by approved firms. Applications for RI status in 2025 An applicant for SASP status must be a RI in Ireland.  As outlined above, an applicant who is approved as RI before 1 January 2026 can avail of transitional arrangements when applying for SASP status (even where that SASP application is made at a date after 1 January 2026).  If an audit firm wishes to designate new RI(s) during 2025 with the intention of ensuring that the RI status of that person is approved by the Institute before 1 January 2026, the firm is advised to submit application(s) for RI status to the Institute as soon as possible, and at the latest by   1 August 2025.    Early application allows time, in most cases, for assessment of the application by the Institute, including where necessary, consideration by the Quality Assurance Committee, before the end of 2025. The Professional Standards Department cannot provide guaranteed timelines for consideration and approval of RI applications as time required depends on the nature of the application.  Complex or incomplete applications for RI status may take longer to process than well-presented, detailed applications which clearly demonstrate an applicant’s competence and experience.  While the transitional arrangements for SASP status may encourage some firms to consider appointing more RIs during 2025 than might otherwise have been intended by the firm, firms are reminded that only appropriately qualified and experienced individuals can be granted RI status in accordance with the Institute’s Audit Regulations. Application forms for RI status are available on the Institute’s website.  Queries regarding RI applications can be directed to authorisations@charteredaccountants.ie.

If your firm wishes to file information at Companies House on behalf of clients or if you plan to verify the identity of certain individuals, you will need to register to be an Authorised Corporate Service Provider. Click here for more information. 

HMRC has become aware of a scam email purporting to come from HMRC asking firms to submit an Annual Supervisory Return with payment of fees as part of their AML supervision. This email is being sent to both HMRC supervised firms and accountancy service providers supervised by the professional bodies. Although the content of the fraudulent email looks very similar to the official gov.uk website it appears to be sent from a false email address ending on @taxuk-access.services. Should you receive a fraudulent email purporting to be from HMRC, please do not click on the links and report this via https://www.gov.uk/government/organisations/hm-revenue-customs/contact/reporting-fraudulent-emails

If your firm wishes to file information at Companies House on behalf of clients or if you plan to verify the identity of certain individuals, you will need to register to be an Authorised Corporate Service Provider. Please see the linked document for more information.

Recent trends The Institute’s Professional Standards Department has recently seen an increase in the frequency and complexity of proposed restructures of accounting and audit firms including: Institute firms acquiring or merging with other accounting and audit firms; Changes in a firm’s principals (retirements, additions); Creation of new firms within a firm network structure (including the splitting of an existing firm into a number of smaller firms sometimes with a focus on a particular business line or jurisdiction); Interests in a firm being fully or partially acquired by larger firms or other external investors including the involvement of private equity investors in firm/network ownership structures. These trends are observed in both Ireland and the UK. Early engagement with the Institute advised Firms who are considering a change in the firm’s structure or ownership are advised to engage with the Institute’s Professional Standards Department at an early stage in the process.  Such early engagement is important to ensure that any impact on existing or proposed firm authorisations, and/or on the AML supervision of any entities in the structure, is fully understood and properly planned for.  Law and Institute Regulations in both Ireland and the UK set out detailed eligibility criteria which must be met by firms authorised in reserved areas such as audit and investment business.  These eligibility criteria include specific requirements regarding the qualifications of principals and those having ownership/control at authorised firms.  While Institute Regulations require firms to notify the Institute promptly after a change in circumstance which could impact authorisations takes place, firms will benefit from early engagement with the Institute in relation to proposed restructuring transactions.  Firms will, no doubt, want to avoid a situation where a significant transaction concerning the firm’s structure has taken place only to discover that the revised structure negatively impacts the firm’s eligibility for authorisation in a key area. Firms considering a restructure should contact the Institute at authorisations@charteredaccountants.ie.  The Institute will advise the firm regarding the information which should be shared with the Institute initially and as the restructuring plans progress.  The Institute will request information to enable a full understanding of the proposed restructure and the impact on the firm’s eligibility for authorisation(s).  Such information is likely to include the detailed agreements and documentation underlying a transaction such as revised partnership agreements, constitutional documents such as articles of association and where relevant, service level agreements between entities within the revised structure. Frequently, the complexity of restructuring transactions requires that the Institute dedicates significant time to review the relevant documentation, engage with the firm’s principals and conclude in relation to ongoing or new authorisations as a result of a firm restructure.  A firm’s engagement with the Institute early in the restructuring process helps ensure sufficient time for Institute consideration and for the processing of any new applications for individual or firm authorisations arising. The Institute cannot provide legal advice in relation to potential firm structures.  The Institute assesses information provided to conclude whether the Institute can continue to provide authorisations to the restructured firm(s) in reserved areas in accordance with the Institute’s Regulations. Oversight bodies In certain cases, it may also be appropriate for a firm and/or the Institute to engage with relevant oversight bodies such as IAASA or the FRC.  For example, an audit firm which is registered with the FRC as a UK public interest entity (PIE) auditor will be obliged to share information with the FRC in relation to a transaction which could impact UK audit registration. Fees For new notifications of restructuring arrangements received on or after 1 January 2025, the Institute may charge a separate fee to firms for the consideration of the impact of a firm restructure on a firm’s authorisations in reserved areas and/or on AML supervision where relevant.  The fee will be dependent on the complexity of the proposed restructure and the work involved in the Institute’s assessment of all relevant information.  This fee will contribute to the cost incurred by the Institute in the consideration of the proposed restructure and may include a contribution towards any legal advice which the Institute needs to undertake in this regard. Further information Any queries in relation to any of the matters raised above can be directed by email to authorisations@charteredaccountants.ie

The Institute has revised the Public Practice Regulations with effect from 1 January 2025.  The key change (Regulation 6.19) relates to professional indemnity insurance (PII) requirements at firms authorised for investment business activities in Ireland.  Polices of PII taken out or renewed on or after 1 January 2025, by an authorised investment business firm whose investment business activities extend beyond referral only business,  must, at a minimum, provide cover for €1,564,610 (up from €1,300,380) per claim and €2,315,610 (up from €1,924,560) in aggregate.  This cover should be ring fenced in respect of the firms’ investment business activities.    This change arises from a recent revision by the Central Bank of Ireland of the Conditions and Requirements attached to the Institute’s recognition as an Approved Professional Body (APB).  The Professional Standards Department has recently written in this regard to investment business compliance principals at firms authorised by the Institute to carry out investment business in Ireland. Given the increase in PII requirements for firms generally from 1 September 2024 (PPRs revised effective 1 September 2024) this is not expected to have a significant impact on firms approved by the Institute for investment business in Ireland.    However, investment business firms are advised to discuss this requirement with the firm's PII provider to ensure compliance. Other revisions to the Public Practice Regulations can be summarised as follows: Practising certificate cessation: The list of circumstances in which a practising certificate (PC) will cease is amended to include where membership ceases under Institute Bye-Laws or other Institute Regulations (Regulation 5.5(c)) – this is consistent with other existing Institute Regulations. Practising certificate eligibility: Introduction of a provision for the Quality Assurance Committee (QAC) to require a PC applicant who is a reciprocal member to successfully complete an aptitude test where appropriate. (Regulation 5.10A). Disciplinary arrangements and affiliates: Clarification that a matter relating to an affiliate may be referred to another professional body, where appropriate, when an affiliate is subject to regulation by another professional body (Regulations 7.12 and 7.13) Sustainability assurance engagements:  Revision of definitions of 'reserved areas' and 'accountancy services' to include sustainability assurance work pursuant to CA 2014.  Therefore, consistent with the Audit Regulations (incorporating assurance under CSRD), effective 11 October 2024, a member who is a sustainability assurance service provider (SASP) is required to hold a practising certificate. Change to insolvency regulation: Revisions to reflect cessation of Institute’s role as a Recognised Professional Body (RPB) for the regulation of insolvency in the UK with effect from 1 January 2025. (Definitions: ‘insolvency practitioner’, ‘Insolvency Licensing Regulations and Guidance’, ‘Regulatory Committee’, Regulations 6.2 and 6.5(a)) Note the cessation of the Institute’s non-statutory insolvency practising certificate regime for Ireland was reflected in the Public Practice Regulations effective 1 September 2024. Miscellaneous:  The opportunity has also been taken at this time to make some minor editorial amendments. The Public Practice Regulations, effective 1 January 2025 are available on the Institute’s website.  Previous versions of the Public Practice Regulations remain available to read on the Archive page of the Institute’s website. Any member queries in relation to the revised Public Practice Regulations can be directed to professionalstandards@charteredaccountants.ie.

The Institute has revised the CPD Regulations with effect from 1 January 2025.  CPD Regulation 4.6 now specifically mentions 'sustainability assurance' as a subject area in which a member who is working in practice should undertake CPD if that member is involved in work of this nature.   This is an explicit application of the core principle that a member should undertake whatever CPD is necessary to ensure that he/she is competent for the work in which he/she is engaged.   Separate from this requirement, any individual who is approved by the Institute as a Sustainability Assurance Service Provider (SASP) should comply with CPD requirements for SASPs as set out in the Institute’s Audit Regulations (incorporating assurance under CSRD), effective 11.10.24.  The CPD Regulations, effective 1 January 2025 are available on the Institute’s website.  Previous versions of the CPD Regulations remain available to read on the Archive page of the Institute’s website. Any member queries in relation to the revised CPD Regulations can be directed to professionalstandards@charteredaccountants.ie.